421.: mcculloch to ricardo1[Reply to 418.—Answered by 422] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 8 Letters 1819-June 1821 [1819]
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The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 8 Letters 1819-1821.
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421.
mcculloch to ricardo
[Reply to 418.—Answered by 422]
Edinburgh 13 March 1821
My Dear Sir
I am quite ashamed at my having been so long in replying to your friendly and excellent letter of the 25th of January—The truth is that I intended to have written to you long ago; but as Mr. Jeffrey intended leaving this place for London very soon, and as I wished to have my article on machinery and accumulation printed before his departure, I was induced to delay troubling you with any communication—When you read over the article in question you will be at no loss to discover the source from whence I have borrowed the greater part of my principles—I have been quite as much indebted to you on this as on other occasions—The letters you have honoured me with, and the perusal of your notes on Mr. Malthus work have furnished me with a sufficient knowledge of the principles regulating the decision of this question, and it must be my own fault if I have not turned them to good account—
I have been so much engaged otherwise that I have not yet had time to consider the subject of value under the view given by you in your letter to me—I shall, however, take an early opportunity of doing so—I should feel considerable reluctance in being obliged to relinquish the stand on capital of the durability of No 1; but although this position were not tenable still it appears to me, on a very hasty consideration of the subject, that the difficulty might be obviated by making a proportional allowance for the different times during which capital is employed in the work of production—When I have reflected more maturely on the subject, I shall take the liberty to lay my opinions respecting it before you—
I read your speech on the agricultural question, as reported in the Courier, with great interest—I confess, however, that I was extremely staggered with some of the positions you are reported to have laid down—Such, for example, as that it was imperative to impose some shackles on the corn trade —and that the country had nearly got the better of all her difficulties —It is impossible you can be accurately reported in what you say about the corn trade, and it is of great importance that you should get the error rectified—If you admit that the trade in corn ought to be shackled to any greater extent than the imposition of a duty on importation equal to the burdens which can be shewn to fall exclusively on the agriculturists, you give up the whole principle of the question—It is impossible to say where interference ought to stop; and a proposal to increase the importation price to 100/would be quite as reasonable as a proposal to reduce it to 60/—Whenever you give up the principle of free trade you are quite at sea, and one duty may be just as good as another—Since your speech came down the monopolists have been quite in high spirits; and I, therefore, entreat of you to take some effectual method of obviating the erroneous impression which the report of it in the Courier is so well calculated to produce—
If in stating that the country has nearly got the better of all her difficulties you mean that the supply of manufactured goods will in future be more nearly adjusted according to the effective demand, and that capital will be better distributed, I should entirely agree with you—But the faulty distribution of capital does not make a tithe of the real and substantial difficulties of the country—Our taxation and our corn laws have lowered, and must continue to lower, the profits of stock in this country—They have brought us into the condition of a snow ball in a furnace—And unless we were surrounded with Bishop Berkeleys wall of brass, our stock will be gradually transferred to other countries—I hold this to be the real difficulty with which the country has to contend, and I have yet to learn that there is the shadow of a ground for saying that it is nearly gone by—I admit that with prudent management the burdens which sink the rate of profit and stimulate the transfer of stock to other countries might be easily reduced; but we have no such management, and in arguing this question we must take things as they are—a bad government—an oppressive system of taxation—and an average price of corn twice as high as the average price of any other country—For a time it may be possible to dam up water or capital to a comparatively high level, but ultimately and in spite of every obstacle it must fall to the general level —Besides is it not absolutely certain that while the corn law system is persevered in we shall continue to experience excessive fluctuations in prices? Why I beg to know should the next five years differ in this respect from the last five? I thought you had admitted that fluctuations at one time had the effect of entailing famine on the consumer and at another time of entailing ruin on the farmer—I may be wrong in this supposition—I suppose I am so—But if I am right it humbly appears to me that nothing could be more completely at variance with this principle than the opinion expressed by you in the Courier—If Political Economy be worth one straw as a science—if there be one principle which may be said to be ascertained—if it is not a mere holyday bauble—we are entitled boldly and confidently to affirm that so long as the present taxation and corn law system is kept up the country never can rise superior to the difficulties—To maintain the contrary is to countenance and propagate a most dangerous delusion—Why ask the minister to abolish taxes, or to relax the barbarous restraints on trade, if we have already nearly got the better of all our difficulties, and are about to enter the haven of prosperity?
You will forgive me for saying so, but it is my honest and sincere conviction that your speech is calculated to do infinite mischief—The opinions of the great mass of those who address the House are not entitled to the least consideration, and do not meet with it—But when we find the first Political Economist of the age stating that the corn trade ought to be shackled—and that in spite of the distresses of the agriculturists, of the pressure of the poor rates, and of taxation that we have nearly got the better of all our difficulties—what are we to think?
I cannot for my own part express to you the concern I feel on this occasion—And did I not flatter myself that your speech had been altogether misrepresented, I should feel as if I had been deprived of my firmest support, and that there was very little in common between my opinions and the person from whom I believed I had derived them all—I am with great regard
Yours most faithfully
J. R. McCulloch
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